UK Road Tax 2025: Your Guide to VED

Vehicle excise duty (VED), more commonly called road tax, is one of the ways motorists have to cough up cash simply to use their cars. It applies to every car, whether new or old, although changes to the rules over time mean that not everyone receives the same road tax bill.

Naturally, the rules changed again in 2025. Here is a useful guide to everything you need to know about UK road tax... and the inevitable complaints about potholes can commence.

What is VED?

In straightforward terms, it is the charge for being allowed to use your car on public roads. Many years ago, the money was intended to be a ringfenced fund for building and maintaining road infrastructure. To cut a long story short, a fellow named Winston Churchill removed that ringfence, so the money became part of the wider pot used for running the country.

That goes some way to explaining the giant craters in my area. How does it work?

They are not called pot holes for nothing. Road tax is compulsory for every car used on the road, unless it is entitled to an exemption. The registered keeper normally renews it after receiving a reminder by post. If you do not have the number shown on that reminder, enter the vehicle's V5C document number directly on the relevant gov.uk webpage (link below) and complete the payment process.

How much is road tax in the UK then?

Good question. Since the start of the 2025/26 tax year, the standard flat rate is £195, having risen from £190 last year.

As with most things, though, it is not quite that simple. The standard rate only applies after the first year. During that first year, the amount due is determined by the vehicle's emissions. From its second year onwards, the standard rate applies.

As if HMRC had not made the system complicated enough, costly cars attract an extra surcharge, while certain other vehicles, including some classics, are exempt.

And EVs have to pay now too, right?

That is correct. From this year, EVs must pay the standard rate, like all other post-2017 cars, following several years of exemption intended to encourage their uptake.

What’s the significance of 2017?

From 2001 to 2017, the amount of tax paid by a driver was determined by the car's CO2 emissions. As shown here, vehicles producing less than 100g/km cost zero pounds to tax, and lower emissions meant lower road tax – in some cases, just twenty or thirty quid.

Plenty of those cars from around 2015 also meet ULEZ regulations, so keeping an eye on the classified ads is worthwhile. From 2025, however, they too will have to pay a different road tax rate, beginning at £20.

What’s the surcharge on expensive cars about?

Where a car costs more than £40,000 after options, an annual surcharge applies, starting at £425 for 2025, up from £410 for 2024. Be aware that even if a showroom offers a deal that brings the on-paper price below £40k, the car will still count as costing over £40k for tax purposes.

The surcharge begins in the second year of ownership and must then be paid for another five years in addition to the standard rate. Ouch. Yet the £40,000 threshold has remained unchanged since 2017 and, given that minor fiscal issue of inflation in the years since, some people believe it should increase to £60,000. That is a debate for another day, though.

What about VED exemptions?

Classic cars more than 40 years old do not need a VED payment. However – because anything involving tax always has a catch – the exemption is not automatic.

Since classics originated before the digital age, the vehicle must be registered for automatic exemption. Even after that, you will continue receiving reminder emails requesting £0.00 unless you fill in an online form. Fail to do so and an £80 fine could soon be heading your way.

Any good news?

Well, not really. Hybrids once qualified for a discount, but that ended in 2025. Sorry.

How do I check my road tax?

Visit this government website page and follow the payment process. Alternatively, call the DVLA on 0300 123 4321 – good luck!